- An online connection between shoppers and their favourite merchants
- Model shows great potential, with room for much more expansion
PASAR is another online grocery platform entering an increasingly competitive market. The Malaysia-based platform, which launched in September this year, is delivered solely through an app and, unlike most online grocery ordering and delivery apps, sources its groceries from wet markets, known as ‘pasar’ in the national language Bahasa Malaysia.
The platform is currently available in Kuala Lumpur and users can order groceries from five different wet markets – the markets in Taman Tun Dr Ismail, Jinjang, Taman Muda, Kampung Datuk Keramat, as well as Jalan Othman.
“We are the only multi-pasar platform and marketplace,” says co-founder and director Tunku Nasruan Adil Mudzaffar, who is known as Eddy.
The startup, owned by holding company Munaq Holdlings Sdn Bhd, is one of two in Malaysia that offers this kind of service. The other, PasarTap, launched in the last quarter of 2016 and so has more traction and is now in Kuala Lumpur as well as the northern Malaysian state of Penang.
One major difference between the two, however, is the operation model. PasarTap sources its fresh groceries from big wet markets (two in Kuala Lumpur) in general – the user does not know which market or merchants the groceries are coming from – and its shoppers pick out the groceries and pass them to the delivery riders, who then deliver the groceries.
Pasar gets individual merchants on board so that users can pick a particular market and then a particular merchant to buy from; there are currently 78 merchants across the five markets on the app. The reasoning behind this, is that people generally go to the same markets and buy from the same merchants whom they like.
Pasar also offers non-halal groceries (PasarTap does not), with users being able to specify in their personal settings if they are Muslim or non-Muslim.
E-distribution channel for merchants
The Pasar service is free for merchants. Pasar manages the orders, informs the merchants of the orders, the merchants pick out the produce from their stalls themselves to pass to the delivery rider to deliver to the user.
The names and photos of the individual merchants and their stalls are on the app so that users can easily recognise and identify the merchants they want to buy from, explains director Tunku Danny Nasaifuddin Mudzaffar.
Pasar is also a new distribution channel for merchants that provides them with an additional revenue stream. Further, individual merchants have access through the platform to new customers who do not usually go to wet markets – younger people who prefer buying online.
According to co-founder and chief executive officer Jeysie Wong, the prices that users pay on the app are the same prices they would pay in the wet markets. Pasar does take a 10% handling fee out of each total sale and charges a delivery fee.
“We are being transparent and we don’t mark up our prices. When we say we help our merchants we mean it. The prices we list on the app are the same prices that each merchant charges in the market,” she says.
Pasar is working on getting more merchants onto the app; Eddy says that convincing some merchants to get on board was initially challenging because they could not understand how a wet market could get online.
“It’s an education process for them and for us,” says Eddy.
Because the merchants on the app do not cover all categories of groceries, Pasar has added a ‘Fulfilled by Pasar’ option where it has its own shoppers buy certain groceries from stalls not on the app.
Low awareness but great potential
A few months after its launch, Pasar now has about 5,000 downloads but usage is still low at about 70 users. Danny says that people download, examine and play around with the app but do not use it to purchase groceries; this is the gap that Pasar needs to close.
Wong puts forth a few reasons people are reluctant to use the app – it is very new compared with more popular supermarket grocery apps such as honestbee and HappyFresh, people do not understand that Pasar can connect them with wet market merchants, and they doubt that Pasar can help them because the delivery times are limited.
Pasar currently delivers in four time-slots starting at 9am and ending at 5pm. Wong explains that this is because Pasar is still quite lean and does not have enough delivery riders to expand the slots and also because Pasar guarantees fresh groceries, it only delivers during the times the wet markets operate – most are not open in the evenings or at night.
Pasar’s target market is young working people who do not have the time during the week to go to the market and would rather spend their weekend doing other things than waking up early to go to the market to do their week’s shopping.
“We came up with this idea to solve that problem,” says Wong, adding that she does believe, however, that there is no reason for the older generation not to learn how to use the app and shop online.
Pasar is concentrating on digital marketing to attract its target audience, primarily using Google ads and SEM advertising. It previously had coverage from two blog sites, which Wong says drew in a lot of young mothers as users, though the one negative was that because the coverage was nation-wide, Pasar had to disappoint some potential users because it is only in Kuala Lumpur for now.
The platform will expand to northern Malaysia in January next year, starting with the Universiti Sains Malaysia campus in George Town, Penang and the Universiti Tunku Abdul Rahman campus in Kampar, Perak.
The next upgrade to the platform is offering it in two other languages – Bahasa Malaysia and Mandarin; it is currently only in English. Wong says that language translation is vital for expansion within the country, which the startup is now focusing on, because in multi-cultural Malaysia a significant percentage of people know the names of certain groceries only in their mother tongue.
This will certainly open up a wider market for Pasar; it already has a wider potential market than competitor PasarTap because of its non-halal offerings. Eddy points out that there is no reason the market cannot support both platforms at once.
“We want to expand the pie, not take their piece of the pie away from them,” he says.
Pasar aims to have 100,000 downloads by end of 2018, with 80-90% active users. Wong reveals that Pasar has hit about RM10,000 (US$24,519) of revenue in little more than two months of operation, a small number but one that shows the potential of the startup.
“The importance of a startup is the potential of the business model. This number tells us that this model works,” she says.
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